ATTORNEYS:For
the plaintiff-appellant the cause was submitted on the briefs of Michael
Jan Steckelis of Madison.

Respondent

ATTORNEYS:For
the defendants-respondents the cause was submitted on the briefs of James
E. Doyle, attorney general, and Lowell E. Nass, assistant attorney
general; Thomas M. Rohe, of Otjen, Van Ert, Stangle, Lieb and Wier,
S.C., of Milwaukee; and Walter D. Thurow and Jennifer M.
Collingon, of Thurow Law Offices, of Madison.

COURT OF APPEALS

DECISION

DATED AND RELEASED

April 17, 1997

NOTICE

A party may file with the
Supreme Court a petition to review an adverse decision by the Court of
Appeals.See § 808.10 and
Rule 809.62, Stats.

This opinion is subject to
further editing.If published, the official
version will appear in the bound volume of the Official Reports.

No.96-1024

STATE OF WISCONSININ COURT OF APPEALS

SCOTT WRIGHT,

Plaintiff-Appellant,

v.

LABOR & INDUSTRY REVIEW COMMISSION,

MONTEREY MILLS, INC., CITY CAB AUTO REPAIR, INC.,

EMC COMPANIES, and GENERAL CASUALTY COMPANY,

Defendants-Respondents.

APPEAL from a judgment
of the circuit court for Rock County:MICHAEL J. BYRON, Judge.Reversed
and cause remanded with directions.

Before Eich, C.J.,
Dykman, P.J. and Roggensack, J.

EICH, C.J.Scott Wright appeals from a judgment
affirming an order of the Labor and Industry Review Commission modifying the
proposed findings of fact and conclusions of law rendered by a Department of
Labor, Industry and Human Relations administrative law judge (ALJ) in this
worker's compensation case.The effect
of the Commission's decision was to determine that Wright had not suffered any
permanent disability as a result of a work-related injury.

Wright argues, among
other things, that: (1) the Commission exceeded its authority when it addressed
the permanency of his injuries when the only issues covered at the hearing
before the department related to temporary disability and medical expenses; and
(2) due process and principles of fundamental fairness entitle him to an
opportunity to present evidence on permanent disability.We agree and reverse the judgment.

While working as a
coating operator at Monterey Mills, Inc., in May 1989, Wright injured his lower
back when he slipped and fell from an elevated track on which he was
working.He was hospitalized and
received medical care for several months before he was able to work again.Wright began working for City Cab Auto
Repair in August 1989, and continued to experience lower back pain. In October
1991, he sought additional treatment after a sudden onset of pain in his back
and legs.Eventually, he had to stop
working altogether.

Wright applied for
worker's compensation benefits.His
application sought compensation for temporary disability and medical expenses
and put forth an additional claim not relevant here.After holding a hearing, the department's ALJ filed findings of
fact and conclusions of law determining that Wright's back problems arose out
of his 1989 injury at Monterey, and entered an interlocutory order awarding
temporary total disability and medical expenses.The order expressly reserved jurisdiction in the department with
respect to any claim or benefits for permanent disability arising out of the
injury.

Monterey and its insurer
appealed to the Commission.The
Commission modified the ALJ's findings and order, affirming the award of
temporary disability and medical expenses,[1]
but went on to rule that Wright reached a "healing plateau" as of May
1993 and thus did not sustain any permanent disability as a result of the 1989
injury.Wright sought judicial review
and appeals the trial court's judgment affirming the Commission's decision.

In administrative review
proceedings, we review the agency's decision, not the trial court's, Langhus
v. LIRC, 206 Wis.2d 493, 500, 557 N.W.2d 450, 454 (Ct. App. 1996), and
our review is limited by statute.Under
§ 102.23(1)(e), Stats., we may
set aside the Commission's order or award only if it appears:

1. That the commission acted without
or in excess of its powers.

2. That the order or award was
procured by fraud.

3. That the findings of fact by the
commission do not support the order or award.

We may
also set aside the Commission's decision if we determine that its award
"depends on any material and controverted finding of fact that is not
supported by credible and substantial evidence."Section 102.23(6).

Trimmed to its
essentials, Wright's position on appeal is that the Commission lacks authority
to rule on matters not tried before the department or agreed upon by the
parties.It is, on its face, a question
of law, and while we ordinarily pay some degree of deference to an agency's
interpretation of statutes it is charged to administer, Lisney v. LIRC,
171 Wis.2d 499, 505, 493 N.W.2d 14, 16 (1992), "an agency's decision
dealing with the scope of its own power is not binding on this court," and
we owe it no deference.Amsoil,
Inc. v. LIRC, 173 Wis.2d 154, 165, 496 N.W.2d 150, 154 (Ct. App. 1992);
seealsoWisconsin's Envtl. Decade, Inc. v. Public Serv.
Comm'n, 81 Wis.2d 344, 351, 260 N.W.2d 712, 716 (1978).We thus review the Commission's decision in
this case de novo.

As a preliminary matter,
the parties dispute whether permanent disability was an issue at the hearing
before the department.The Commission[2]
claims that it was, citing (1) a statement in the notice of hearing that one of
the issues was "primary compensation"; (2) a statement by the ALJ at
one point in the hearing that "at issue is ... the nature and extent of
disability"; and (3) a letter from Wright at the time he filed his
application for benefits in 1992 stating that an "expert" would be
testifying at the hearing.

Wright, on the other
hand, points out that he presented no evidence at the hearing with respect to
loss of vocation, bodily function or earning capacity— evidence that is
required for any determination of permanent disability. SeePfister
& Vogel Tanning Co. v. DILHR, 86 Wis.2d 522, 528, 273 N.W.2d 293,
296 (1979); Bituminous Cas. Co. v. DILHR, 97 Wis.2d 730, 736, 295
N.W.2d 183, 187 (Ct. App. 1980).He
also notes that, at the hearing, his attorney objected to the scope of questioning
by Monterey's attorneyregarding the numbness in Wright's legs,stating
that such questions were irrelevant because "we're here today on TTD
[temporary total disability]."

Additionally, the
medical report filed by Wright's treating physician, Dr. Robert Horswill, while
noting that Wright would have "resulting permanent partial
disability," stated that the nature and extent of any such disability were
"not yet rated as of the time of hearing."Finally, the ALJ informed the parties at the hearing that
"[b]ecause [Wright] may require further treatment for his work injury, and
may well have sustained permanent partial disability and may be entitled to
other benefits, jurisdiction is reserved."

We think it is clear
that permanency was not litigated before the department, and the question
remains whether, given that fact, the Commission could properly rule on the
permanency issue on Monterey's appeal from the department's decision awarding
temporary disability benefits.

Arguing that the
Commission lacked authority to so rule, Wright begins by referring us to §
102.18(3), Stats., which provides
that, in reviewing the decision of an administrative law judge, "the
commission shall either affirm, reverse, set aside or modify the findings or
order in whole or in part, or direct the taking of additional evidence.This action shall be based on a review of
the evidence submitted."

The Commission contends
that these cases are inapplicable because the evidence it relied on to reach
its decision on permanency was in the record before the department.It is true that some evidence of permanency
was received at the hearing.[3]But the facts referred to above—particularly
the ALJ's decision to make the order interlocutory—establishes beyond
peradventure that the question had not been fully litigated in any sense of the
term when the case came before the Commission.

We are also impressed
with Wright's argument that due process and considerations of fundamental
fairness dictate that he be given the right to further hearings on the untried
issues.Whether a party in an
administrative proceeding has received due process is a question, like the
extent of the agency's jurisdiction and powers, which we review de novo,
owing no deference to the agency's decision. Hakes v. LIRC, 187
Wis.2d 582, 586, 523 N.W.2d 155, 157 (Ct. App. 1994).The question turns on the presence or absence of "fair
play." Bituminous, 97 Wis.2d at 734, 295 N.W.2d at 186.

The term is not unknown
to the law.The elements of "fair
play" are: (1) the right to reasonably know the charges or claims; (2) the
right to meet such charges or claims with competent evidence; and (3) the right
to be heard by counsel upon the probative force of the evidence presented by
both sides of the applicable law.Id.Wright's position is that the procedure the
Commission followed— considering the issue of permanency in light of the state
of the record at the time— offends traditional notions of fair play by denying
the parties notice as to what issues would be tried and a hearing on such
issues.[4]

We agree.The ALJ's ruling was plainly limited to the
cause of the injury, temporary disability and medical expenses.And the Commission's ruling not only
prevented that from happening, it extinguished any opportunity on Wright's part
to advance a claim for permanent injury, despite the department's reservation
of jurisdiction over that issue.In Borum
v. Industrial Comm'n, 13 Wis.2d 570, 573, 108 N.W.2d 918, 920, cert.
denied, 368 U.S. 926 (1961), the supreme court stated:

When the commission makes ... a final award it
is not passing upon merely the employee's right to compensation for certain
claimed or then-known injuries.It is
passing upon all compensation payable for all injuries caused by that
accident....[and] [h]aving entered a final order ... [it] lacks jurisdiction to
proceed on a subsequent application for injuries allegedly sustained in the
same accident.

(Citations
omitted.)

We are mindful that
principles of finality should apply to worker's compensation claims.Kwaterski v. LIRC, 158 Wis.2d
112, 118, 462 N.W.2d 534, 536 (Ct. App. 1990).But injured workers have a right to a full and fair hearing of their
claims, and denial of such a hearing is a denial of due process. Bituminous,
97 Wis.2d at 735, 295 N.W.2d at 186.[5]

The
Commission disagrees, citing us to a statement in Miller Brewing Co. v.
LIRC, 173 Wis.2d 700, 719-20, 495 N.W.2d 660, 667 (1993): "LIRC
has the duty `to find the facts and determine the compensation irrespective of
the presentation of the case by the attorneys.'"(Quoted source omitted.)An examination of the Miller opinion, however, indicates
that the statement was made in an entirely different context, and we do not
consider it controlling here.[6]

Because we conclude, for
the foregoing reasons, that the Commission improperly considered and ruled upon
issues that were not litigated before the department—issues, in fact, upon
which the department expressly reserved jurisdiction—we reverse judgment
affirming the Commission's order of August 10, 1994.We remand to the trial court with directions to enter judgment
reversing the Commission's order insofar as it modified the final paragraph of
the ALJ's findings of fact and deleted the last sentence from the ALJ's
order.Further proceedings shall be
consistent with this opinion.

By the Court.—Judgment
reversed and cause remanded with directions.

[1] Monterey and the
other respondents do not dispute that there was evidence before the Commission
from which it could determine that Wright's injuries arose out of his
employment at Monterey.

[2] While Monterey and
Wright's subsequent employer, City Cab, and their insurers are also parties to
this appeal, they all seek affirmance of the Commission's decision and, for the
sake of convenience, we refer to them collectively as "the
Commission."

[3] Wright underwent
two separate medical evaluations, and the reports of those examinations—which
were before the ALJ—contained isolated references to permanent disability.One, submitted by Monterey, stated that
Wright's healing process had reached a "plateau" and that, in
Monterey's physician's opinion, he had sustained little or no "permanent
partial disability."A report
submitted by a physician retained by City Cab stated that Wright had not
sustained any disability, either temporary or permanent.

As indicated, the report submitted by Wright's treating
physician, Dr. Horswill—which the ALJ found to be the "most credible"
of the batch—stated that while Wright had suffered some permanent disability it
was impossible to determine its extent because, at the time of his examination,
Wright had "not reached a healing plateau."

[4] Wright relies on Industrial
Comm'n v. Jewel Cos., 465 N.E.2d 935 (Ill. App. Ct. 1984), where the
court considered a factual situation similar to the one presented here—although
the shoe was on the other foot.The
only issues at the employee's worker's compensation arbitration hearing were
the employer's liability and the employee's temporary total disability.When the case reached the Commission,
however, the employee was awarded benefits for permanent disability.Id. at 936.On the employer's appeal, the Illinois Court
of Appeals stated that because only temporary disability was litigated at the
hearing and no evidence was offered on permanent disability, the Commission
exceeded its authority in granting permanent disability.Id.While the Jewel court did not refer to "due
process" or "fundamental fairness" in its opinion, its
conclusion that the Commission "erred in resolving an issue that was not
litigated by the parties," id., satisfies us that such
considerations drove the court's decision.

The
respondents in this case attempt to distinguish Jewel because it
involved an Illinois statute, which provided:

The Arbitrator ... may find that the disabling condition is
temporary and has not yet reached a permanent condition and may order the
payment of compensation up to the date of the hearing, which award shall be
reviewable and enforceable in the same manner as other awards and in no
instance be a bar to a further hearing ....

Ill. Rev. Stat. § 19(b).

They argue that chapter 102, Stats., contains no similar language.Section 102.18(1)(b), however, contains
provisions of substantially similar import: "[T]he department may in its
discretion after any hearing make interlocutory findings, orders and awards
which may be enforced in the same manner as final awards."This statute is designed to permit the
Wisconsin Commission to do just what the Illinois Commission did in Jewel:
to issue an interlocutory order reserving jurisdiction over any claim of
permanency in cases where, at the time of the initial hearings, the applicant
"had no present permanent disability or impaired earning capacity but that
permanent disability may occur in the future."Vernon County v. DILHR, 60 Wis.2d 736, 740, 211
N.W.2d 441, 444 (1973).We see no
difference between that situation and the instant case, where the "most
credible" medical evidence before the department was that, while Wright
undoubtedly had a permanent injury, its nature and extent were not yet
ascertainable at the time of the hearing.

[5] In Bituminous
Casualty Co. v. DILHR, 97 Wis.2d 730, 295 N.W.2d 183 (Ct. App. 1980),
the department denied an employer's request for a prehearing conference to
discuss the claimant's medical evidence, advising it that further hearings
would be held if unanticipated evidence was introduced. Id. at
733, 295 N.W.2d at 185.When such
evidence was allowed, and a further hearing denied, the employer appealed and
the case eventually reached this court.We reversed the agency's decision, stating that the procedure it
followed "offends the traditional notions of fair play and due
process."Id. at
735, 295 N.W.2d at 186.

[6] The sole issue in Miller
Brewing Co. v. LIRC, 173 Wis.2d 700, 495 N.W.2d 660 (1993), was whether
one of the employer's two worker's compensation insurers was an "adverse
party" within the meaning of § 102.23(1)(a), Stats., which requires "adverse parties" to be made
parties to proceedings for judicial review of Commission orders.The Commission awarded benefits in the case
and the employer sought review without naming one of the insurers as a
party.On the employee's motion, the
trial court dismissed the employer's action on grounds that its failure to
comply with the statute deprived the court of subject matter jurisdiction.

On
appeal, the employer argued that whether the absent insurer was an
"adverse party" to the proceedings before the Commission should be
determined by the position taken by the two insurers and the employer during
the administrative proceedings—that all three had opposed the worker's claim
and were thus united in interest, rather than adverse.The supreme court rejected the argument,
stating that "the nature of the proceedings is [not] determinative [of the
issue] in this case" and that the "strategy" the parties adopted
at the hearing was not binding on the Commission.Id. at 719, 495 N.W.2d at 667.It is in that context that the quoted
statement about the Commission's ability to find facts "irrespective of
the attorneys' positions" was made.

We do not see Miller as authority for the
proposition advanced by the Commission that it has the authority to entertain
unlitigated issues on an appeal from the department's decision in a worker's
compensation case.